An expert group on welfare set up by the Scottish government has recommended a substantial rise in the minimum wage. It said the rate received by the lowest paid should go up by more than £1 per hour if Scotland votes for independence.
The recommendation from the Scottish government’s advisory group was that the minimum wage should match the ‘living wage’ within five years of independence – a rise from £6.31 to £7.65 per hour.
Responding to the latest report, Deputy First Minister Nicola Sturgeon said support to get people into work, action to make work pay and the provision of a strong and decent safety net for those who are unable to work should be the focus of the welfare system in an independent Scotland.
The independent Expert Working Group on Welfare’s second report outlines a vision for a fairer, simpler and more personal welfare system and provides nearly 40 recommendations for change following independence.
The Deputy First Minister confirmed that in an independent Scotland the current government would take forward recommendations, including those to improve support for carers, restore the link between benefits, tax credits and the cost of living and abolish the current Work Capability Assessment.
She also confirmed that the Scottish Government would carefully consider the Group’s recommendations on the minimum and living wage, introduction of a new Social Security Allowance and replacement of the Work Programme with more targeted support to help people find and sustain employment.
Ms Sturgeon said: “I warmly welcome the independent Expert Working Group’s report and thank the members for their significant contribution. The Group’s report includes a wide ranging package of recommendations which would help us create a welfare system in an independent Scotland that better meets our needs.
“As part of their discussions, the Group have engaged with a wide range of people and organisations. It is clear they have listened closely not only to how people feel about welfare, but also how the current reforms are affecting their lives.
“In particular, I strongly endorse the Group’s view that the welfare system should act as a strong safety net and a springboard to a better life. They are right when they say that work should be the best route out of poverty for most people but that the rise in in-work poverty needs to be addressed if this is to be the reality.
“Following a vote for independence, we would be committed to taking on several recommendations straight away to deal with those aspects of the current system that are pushing so many people into poverty.”
The Government would:
• Increase Carers’ Allowance to £72.40 per week, the same rate as Jobseeker’s Allowance for those aged 25 or over. This would amount to an extra £575 a year for the 102,000 people in Scotland who are eligible to claim the allowance.
• Re-establish the link between benefits and the cost of living, with benefits and tax credits being increased each year by the Consumer Prices Index of inflation.
• Abolish the ‘Bedroom Tax’.
• Replace the current system of sanctions with one that is fairer, more personalised and positive.
• Abolish the current Work Capability Assessment that determines the ability to work of the sick and disabled.
• Establish a National Convention on Social Security at the start of 2015.
The Government will also carefully consider the Group’s other recommendations. These include:
• Increasing the National Minimum Wage to equal the Living Wage and with reductions in Employers’ National Insurance contributions to help businesses make this transition.
• Replacement of the Work Programme with new initiatives developed in partnership with those out of work to help them find, and stay in, employment.
• Introducing a new Social Security Allowance that would bring together existing benefits but which would exclude Housing Benefit.
• Better supporting those with long-term disabilities and illness into work.
The Deputy First Minister added: “We are committed to mitigating the harmful effects of Westminster’s welfare reforms where we can, such as securing the transfer of powers over discretionary housing payments to the Scottish Government, allowing us to help people struggling with the Bedroom Tax.
“The report recognises the increased pressures of in work poverty and some of the difficulties in the current labour market. These are challenges all countries face but we are committed to tackling them head on wherever possible. The growing numbers of people in work but still facing poverty is extremely worrying. They need our support and one way to do this, as the Group suggests, would be through making the Living Wage the National Minimum Wage. We will be looking closely at this proposal.
“We will be considering the Group’s recommendations to replace the Work Programme with more innovative, locally-based schemes, designed to help people find jobs and, importantly, stay in work.
“We will also look at the introduction of a new Social Security Allowance, but would keep Housing Benefit separate from this.
“Our focus will be on prevention rather than dealing with existing symptoms, to develop a society that not only provides fair support and decent opportunities for all but also protects the vulnerable in our society. The only way to guarantee that is to have the powers to deliver progressive reform of the Welfare State – only with independence will we have the opportunity to create a welfare system that is fairer and works for all the people of Scotland.”
However Scottish Lib Dem leader Willie Rennie said people who expected big changes to welfare after independence would be “disappointed” by the report, while Labour maintains that being part of the bigger UK economy offers greater financial security. Scottish Labour’s Jackie Baillie said: “Once again we have uncosted promises from the SNP. You can’t have more generous welfare at the same time as you are cutting taxes – it simply doesn’t add up”.
